Tax and NI

1. Different Taxes

1.1 Both the self-employed and employees pay income tax (see 2, 3 and 4).

1.2 A limited liability company pays corporation tax (see 5).

1.3 Employers are responsible for collecting and paying the tax on employee pay and benefits (see 9).

1.4 Employers are also responsible for paying National Insurance contributions for, and on behalf of, employees (see 10).

1.5 Value added tax (VAT) is payable on 'supplies' (usually sales) of goods and services (see 11).

1.6 Capital gains tax (CGT) may be payable when certain assets are sold for more than they cost (see 12).

1.7 Stamp duty land tax (SDLT) is charged on transfers of land and property.

• For commercial property transactions, SDLT rates are 1 per cent on transfers in excess of £150,000, 3 per cent in excess of £250,000 and 4 per cent in excess of £500,000. Stamp duty at 0.5 per cent is charged on share transfers.

1.8 Substantial tax breaks are available to investors in small or medium-sized companies (see 13).